Uruguay’s economy is characterised by an export-oriented agricultural sector, a well-educated workforce and high levels of social spending, as well as a developed industrial sector. In recent years Uruguay has shifted most of its effort into developing the commercial use of IT technologies and has become the leading exporter of software in Latin America.
Uruguayan and Australian foreign and trade policy interests coincide in several key areas, and they have generally cooperative relations across a range of multilateral forums. These include close cooperation on international agricultural trade access issues through joint membership of The Cairns Group and World Trade Organisation (WTO) and cooperation on issues relating to the Antarctic, especially in efforts to address illegal fishing through the Convention on the Conservation of Antarctic Marine Living Resources (CCAMLR).
As a fellow dairy exporter, Uruguay shares common interests with Australia on international dairy access issues. Other areas of natural interest include pasture development, herd / bull progeny testing and agricultural training; several agreements have been signed and visits have been paid between technical missions of the Instituto Nacional de Investigación Agropecuaria (INIA) and AgriBio, Centre for AgriBioscience in Melbourne, as well as the Department of Environment and Primary Industries in Victoria.
Owing to the Promotion and Protection Investments Agreement between both countries signed on 3 September 2001 the investment flows have been increasing. During the past years the Australian business presence in Uruguay has becoming more important. There are Australian investments in areas such as baking products, entertainment, logistics services and mining. Two new areas for potential Australian export growth include tourism and education. Other sectors are telecommunications, agribusiness, consumer goods, construction and building materials.
A Memorandum of Understanding (MOU) on agricultural cooperation was signed on 2 July 2003 during the visit of the Minister for Agriculture, Fisheries and Forestry Mr.Warren Truss to Uruguay that commits both countries to encouraging closer cooperation through relevant authorities. In April 2010, Australia signed an MOU on Strengthening Bilateral Trade and Investment with Uruguay. The signing of the MOU took place during the visit by then Trade Minister Simon Crean to Uruguay, during which he co-chaired the Cairns Group Ministerial meeting with Foreign Minister Almagro. In 2011, the Australian Uruguayan Chamber of Commerce was established. The Chamber, based in Uruguay, operates under the form of a non-profit civil association. It focuses on promoting and developing relations between Uruguay and Australia. In November 2012, Australia and Uruguay signed an MOU for a work and holiday visa arrangement between the two countries which came into force on 1 April 2013.
In 2012 two-way merchandise trade with Uruguay totalled around $37.2 million, with Australian imports from Uruguay totalling around $21.07 million. Imports mainly comprised edible products, oils and perfumes and carboxylic acids and derivatives. Exports to Uruguay totalled $16.17 million in 2013, comprised mainly of barley, crude vegetable materials and animal oils and fats.
Uruguay’s strong GDP growth, political stability and low corruption levels have made Uruguay an attractive destination for investment. Foreign Direct Investment (FDI) has increased substantially in recent years, particularly in agriculture, forestry and tourism. Uruguay led Latin America in FDI growth in 2010 and is expected to continue attracting foreign investment through concerted efforts which include increasing transparency and the new public-private partnership scheme. In 2012, FDI in Uruguay was estimated at US$2.7 billion, a five-fold increase over the 2000-2006 average.
Similarities in the primary exports of Uruguay and Australia present opportunities for the export of Australian agriculture-related technology and services, including animal genetic material. One strategy for Australian companies looking to invest and trade in Uruguay is to extend existing interests they may have in Argentina and Brazil. Australian companies with existing interests in Argentina and Brazil may find that the close commercial ties that these countries have with Uruguay may facilitate entry into the Uruguayan market.
New opportunities for Australian investment are opening up in the areas of agriculture, mining and infrastructure. The public-private partnerships initiative presents additional opportunities for Australian companies to invest in Uruguay through infrastructure projects, such as deep-water ports, roads, rail, river transport, energy (oil, gas and wind farms), irrigation dams, tourism infrastructure, recreational ports and marinas, hospitals and jails. Australian company Petrel Energy, in association with US Company Schuepach Energy International, has interests in significant oil and gas discoveries in Uruguay, particularly in the Norte Basin.
Australia-Uruguay trade 2008-14 fact sheet (30kb pdf)
Most text see Footnote 1
- Skilled multilingual workforce
- Australian-Hispanic economic relations:
- Australian companies in Latin America
- Important web links